Basically, a business plan is your road map for how you expect to succeed and how you’ll measure success. Unfortunately, it is usually only followed or actually used during the initial start up phase for things like funding, obtaining venture capital or snaring investors, banks and other partnered resources. A huge mistake. A smart businessperson will keep their business plan handy throughout the course of their business lifetimes and review it monthly. It is the bible they must adhere to and never misplace. It is also a “living document” that will change or evolve as your business grows and should be thought of as your company’s life blood.

Here is a quick nine-step guide to what you will need in your company’s business plan:

AN EXECUTIVE SUMMARY OUTLINING GOALS AND OBJECTIVES. The executive summary introduces your business strategy and is probably the most important section for lending institutions. If you can’t persuade a loan officer in the first two or three pages that you’ve got a viable business proposal, you’re going to leave empty-handed. It’s just that simple folks. This summary is also important as a communication tool for employees and potential customers who need to understand - and get behind - “your” ideas.

A BRIEF ACCOUNT OF HOW THE COMPANY BEGAN. Clearly explain the origins behind the company’s creation and how you or your business associate(s) came up with the idea to start your business.

YOUR COMPANY’S GOALS. Explain in a few paragraphs your short - and long - term goals for the company. How fast do you thik it will grow? Who will be your primary customers?

BIOGRAPHIES OF THE MANAGEMENT TEAM. The management section should include the names and backgrounds of lead members of the management team and their respective responsibilities.

THE SERVICE OR PRODUCT YOU PLAN TO OFFER. A key aspect of this section will be a discussion of how your product or service differs from everything else on the market.

THE MARKET POTENTIAL FOR YOUR SERVICE OR PRODUCT. Remember that you’ve got to convince lenders, employees and others that the market you’re after is relatively large and growing. You’ll need to do some research for this section. If it’s a locally owned business, you need to assess the demand for your offering within an xx-mile radius, based on what your determine is a reasonable distance from your business. If it’s a Web-based business or a business that relies on both the Internet AND local traffic for revenues, you’ll need to evaluate demand on a local and/or national basis. A research report from sites such as Forrester Research can cost hundreds to thousands of dollars. But you may be able to get some basic information simply by using the Web and its many search engines and directories.

A MARKETING STRATEGY. How do you plan to tell the world you’re open for business? Will you rely exclusively on word of mouth? (not a good plan unless you’ve already got a reputation) Will you advertise in print, television or on the Web? (or all three?) Will you use online marketing tools to get your company listed on search engines and advertised on other Web sites? You’ll also need to include how much you plan to spend on marketing.

A THREE TO FIVE YEAR FINANCIAL PROJECTION. This section of your plan should include a “summary” (yes, I said summary) of your financial forecasts, with spreadsheets showing the formula you used to reach your projections. You’ll need balance sheets, income statements and cash-flow projections for the entire forecast period. The summary in this section is also where you would tell prospective lenders how much money you’d like to borrow to cover your startup costs. The assumptions that you make in this section will make or break your company’s success. If you’re unsure about using this kind of financial modeling, find a professional. It’s worth the money, people.

AN EXIT STRATEGY. Yes, you read correctly. All good business plans include a section that lays out the benchmarks you’ll use in deciding to call it quits. The strategy could be based on a dollar figure, revenue growth, the market’s reception to your idea, or a consensus among top officers.

If you follow the steps outlined above you will have enough pure data to go forth into this scary world of business. A word of warning, however. There are thousands of different types of softwares, CD’s, content thick guides and even individuals out there willing to take your money under the pretense of making the business plan writing process easy for you. It is a mistake. Only you can write it. Only you can give birth to it. Imagine being suddenly asked a critical question by a banker regarding something contained in your business plan that someone else answered for you. (Hear the screeching tires?) You credibility and the lenders belief in your data just vanished.

As a final suggestion to “ease the pain” of business plan writing, start with a simple rough draft using the guidelines I’ve listed above, then seek out your local S.C.O.R.E (Service Corps Of Retired Executives) Chapter office and find out about attending their workshop. In most cities throughout the nation these seminars are either free or very reasonable and provide unbelievable resources and material for free. Not to mention counselors with years of combined experience. I personally highly recommend them.

By Martacus

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